Climate Change Data

Environmental Metrics

ESG Focus Areas

• Climate Change
• Environmental Management
• Sustainable Development Goals (SDGs)

Environmental Achievements

• Reduced CO2 emissions by 36,049tCO2 (location-based Scope 1+2) exceeding the 33% reduction target set in 2015.
• Achieved 18tCO2/year reduction in CO2 emissions at Kageso Plant through the replacement of refrigeration units.
• Achieved 18tCO2/year reduction in CO2 emissions at the Pharmaceutical Research Center through the replacement of heat pumps.

Social Achievements

• Launched initiatives to engage with suppliers and customers on climate-related issues.
• Participated in the Pharmaceutical Supply Chain Initiative (PSCI) and implemented its principles.
• Collected information on packaging improvements from healthcare professionals and patients through the Medical Information Center and Medical Representatives (MRs).

Governance Achievements

• Established board-level oversight of climate-related issues with responsibilities assigned to the Board Chair, CEO, and CSO.
• Implemented incentives for the management of climate-related issues, including monetary rewards for emissions reduction projects.
• Developed a low-carbon transition plan.

Climate Goals & Targets

Environmental Challenges

• Physical risks from extreme weather events impacting direct operations, supply chain, and research & development.
• Transition risks from enhanced emissions-reporting obligations and potential strengthening of regulations (e.g., SBT-level targets).
• Increased costs due to carbon tax and potential future increases in carbon pricing.

Mitigation Strategies

• Developed Business Continuity Plans (BCPs) for factories and research facilities.
• Implemented energy efficiency measures, including machine/equipment replacement and efficient operation of air conditioning equipment.
• Planned for the introduction of renewable energy sources and high-efficiency equipment.

Supply Chain Management

Supplier Audits: 9 audits in 2019

Responsible Procurement

• Adherence to PSCI Principles

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events impacting direct operations, supply chain, and research & development.

Transition Risks

• Enhanced emissions-reporting obligations and potential strengthening of regulations (e.g., SBT-level targets).

Opportunities

• Increased investment due to improved ESG ratings.
• Reduced operational costs through energy efficiency improvements.
• Access to new markets for infectious disease treatments due to climate change impacts.

Reporting Standards

Frameworks Used: Greenhouse Gas Protocol, Japan Ministry of the Environment, Law Concerning the Promotion of the Measures to Cope with Global Warming

Third-party Assurance: Third-party limited assurance for Scope 1, 2, and some Scope 3 emissions.

UN Sustainable Development Goals

• SDG 3: Good Health and Well-being
• SDG 7: Affordable and Clean Energy
• SDG 13: Climate Action

Shionogi's initiatives contribute to these goals through its focus on infectious disease treatments, energy efficiency, and emissions reduction.

Environmental Metrics

ESG Focus Areas

• Supply Chain Management
• Socially Responsible Products and Services
• Human Rights
• Environmental Protection
• Compliance
• Corporate Governance

Environmental Achievements

• Achieved 100% renewable energy-derived electricity introduction rate to the main sites of research laboratories.
• 10% reduction in greenhouse gas emissions (t-CO2) from 2019 to 2022.
• Introduction of renewable energy-derived electricity at the CMC Innovation Center and Pharmaceutical Research Center.
• Recycle 65% of plastic waste (target for FY2030).

Social Achievements

• 100% of new suppliers in fiscal 2022 consented to the SHIONOGI Group Business Partner Code of Conduct.
• Provided training to 74 employees involved in procurement operations on sustainable procurement.
• Conducted human rights due diligence, including assessments of significant suppliers and on-site audits.
• Held briefings and interviews with 29 suppliers on human rights and climate change.
• Issued a statement in accordance with the Modern Slavery Act.

Governance Achievements

• Increased the number of outside directors by one, resulting in a 2:4 ratio of internal to external directors.
• Established the Nomination Advisory Committee and Compensation Advisory Committee, both chaired by outside directors.
• Regularly holds informal meetings between outside officers and the President for frank opinion exchange.
• Implemented AI-powered monitoring for compliance.

Climate Goals & Targets

Environmental Challenges

• Rising raw materials prices and logistics disruptions.
• Supply-demand imbalance for some pharmaceuticals.
• Industry-wide quality issues.
• Climate change risks (carbon pricing, impacts on raw materials procurement, sea level rise).
• Antimicrobial resistance (AMR).
• Maintaining a high internally-discovered pipeline ratio.
• Digital transformation challenges.
• Compliance risks in a rapidly changing environment.

Mitigation Strategies

• Regular risk assessments and measures such as promoting improvements, adding alternative suppliers, and establishing redundant procurement for high-risk suppliers.
• Flexible information collection and adjustment of shipment volumes to prevent shortages.
• Fostering a quality culture and rigorous compliance throughout the supply chain.
• Setting Science Based Targets (SBT) for greenhouse gas emission reduction.
• Introducing renewable energy-derived electricity.
• Implementing audits on AMR throughout the supply chain.
• Strengthening human capital management.
• Implementing a digital transformation (DX).
• Establishing compliance committees in each supervisory unit.
• Improving the efficiency of integrated management and monitoring of company-wide risks.

Supply Chain Management

Supplier Audits: 100 companies assessed using EcoVadis in 2022; cumulative total of 101 companies.

Responsible Procurement

• SHIONOGI Group Procurement Policy
• SHIONOGI Group Business Partner Code of Conduct

Climate-Related Risks & Opportunities

Physical Risks

• Impacts on raw materials procurement due to localized extreme weather and temperature rises
• Damage to supply chain facilities caused by more severe storms and floods
• Chronic sea level rise

Transition Risks

• Introduction of carbon pricing
• Stricter energy efficiency regulations

Opportunities

• Cultivation of new markets and regions through R&D of new pharmaceuticals
• Changeover to eco-friendly low-carbon containers and packaging

Reporting Standards

Frameworks Used: TCFD

Certifications: Eco-First Company, ISO 14001, ISO 45001

Awards & Recognition

• Eco-First Company certification
• CDP A List Company (climate change and water security)
• Supplier Engagement Leaderboard

Environmental Metrics

ESG Focus Areas

• 感染症の脅威からの解放
• 健やかで豊かな人生への貢献
• 持続可能な社会保障への貢献
• 医療アクセスの向上
• Governance

Environmental Achievements

• 主要サイトへの再生可能エネルギー由来電力の導入率100%達成
• 2022年度の温室効果ガス排出量削減

Social Achievements

• COVID-19治療薬「ゾコーバ」の国内緊急承認取得
• 人事制度刷新による従業員の自律的なキャリア形成支援
• 女性マネジャー比率の向上
• 育児休業取得率の向上
• 下水疫学調査サービス開始
• ガンマ波サウンドケア「kikippa」の販売開始
• 不眠障害治療用アプリの医療機器製造販売承認取得

Governance Achievements

• 管掌制度導入による意思決定プロセスの改善
• 社外取締役の増員と取締役会におけるダイバーシティの向上
• ERMシステム導入によるリスク管理体制の強化

Climate Goals & Targets

Environmental Challenges

• 感染症ビジネスの収益不安定性
• グローバル展開における課題
• 人材不足
• パテントクリフリスク
• サプライチェーンリスク
• 気候変動リスク
• AMR対策
• コンプライアンス遵守
• データセキュリティ

Mitigation Strategies

• 持続可能な感染症ビジネスモデルの構築
• グローバル販売力の強化
• 人材育成プログラムの充実
• 新規事業への投資
• サプライチェーンの強靭化
• 再生可能エネルギー導入
• GHG排出量削減目標設定
• コンプライアンス委員会設置
• ERMシステム導入
• 情報セキュリティ対策強化

Supply Chain Management

Supplier Audits: 100社

Responsible Procurement

• SHIONOGI グループ調達ポリシー
• SHIONOGI グループビジネスパートナーに求める行動規範

Climate-Related Risks & Opportunities

Physical Risks

• 異常気象による原材料調達への影響
• 風水害によるサプライチェーン設備の被災
• 海面上昇による拠点の操業不可能

Transition Risks

• カーボンプライシング導入
• 省エネ規制の強化

Opportunities

• 環境にやさしい低炭素容器包装への切り替え

Reporting Standards

Frameworks Used: GRI, TCFD, UNGC

Certifications: ISO 14001, ISO 45001

Third-party Assurance: KPMG あずさサステナビリティ株式会社

UN Sustainable Development Goals

• Goal 3
• Goal 7
• Goal 13

Sustainable Products & Innovation

• ゾコーバ
• セフィデロコル
• kikippa

Awards & Recognition

• エコ・ファースト企業認定
• CDP気候変動・水セキュリティAリスト企業

Environmental Metrics

ESG Focus Areas

• Human Capital Management
• Infectious Disease
• Environmental Sustainability
• Supply Chain Management
• Governance

Environmental Achievements

• Not disclosed

Social Achievements

• Launched Yui Connection Co., Ltd. for educational support; Launched kikippa, a gamma wave sound care product for cognitive function; Partnered with SUSMED, Inc. to develop an insomnia treatment app; Mother to Mother SHIONOGI Project: Prevalence of diarrhea down by 58%, percentage of childbirth at public health facilities increased twelvefold.

Governance Achievements

• Implemented SAMS (SHIONOGI Approval Management System 2020) for rapid decision-making; Reviewed organizational structure to oversee value chains; Established Business Administration Office to support decision-making; Transferred 80% of shares of Shionogi Business Partner Co., Ltd. to Accenture Co., Ltd. to improve efficiency.

Climate Goals & Targets

Environmental Challenges

• Patent cliff for anti-HIV drugs; Global delivery of products and services; Maintaining speed in drug discovery; Responding to volatile drug industry; Addressing AMR; Tightening healthcare finances; Global risks (international issues, natural disasters); Ensuring rapid supply of products.

Mitigation Strategies

• Aggressive investment in R&D and new businesses; Building a business portfolio immune to external factors; Strengthening global supply chain; Partnerships with international organizations (GARDP, CHAI, MPP); Strengthening global corporate functions; DX transformation; Human capital management; ESG management.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Sustainable procurement considering environment, human rights, and occupational health and safety

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Null

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Goal 3: Good Health and Well-being
• Goal 9: Industry, Innovation and Infrastructure
• Goal 10: Reduced Inequalities
• Goal 13: Climate Action
• Goal 17: Partnerships for the Goals

Shionogi's initiatives contribute to these goals through drug development, healthcare access, sustainable business practices, and partnerships.

Sustainable Products & Innovation

• Xocova, cefiderocol, vaccines, kikippa, insomnia treatment app

Awards & Recognition

• AMR Benchmark (2021); Noteworthy DX Companies 2023

Environmental Metrics

ESG Focus Areas

• Infectious diseases
• Quality of Life (QOL) diseases
• Supply chain management
• Human rights
• Climate change
• Governance

Environmental Achievements

• Reduced GHG emissions (Scope 1 & 2, market-based) to 72,023 t-CO2 in FY2023
• Achieved 40.8% renewable energy share in total energy use

Social Achievements

• Launched Covgoze, SHIONOGI’s first recombinant protein vaccine
• Increased ratio of female managers to 14.7%
• Reduced employee smoking rate to 3.2%

Governance Achievements

• Expanded the Board of Directors to include two female directors
• Implemented a performance review for the Representative Director, President and CEO

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions
• AMR (Antimicrobial Resistance)
• Global market contraction for infectious disease drugs
• Decreasing number of researchers in the field of infectious diseases
• High reliance on royalty business
• Unmet needs in QOL diseases

Mitigation Strategies

• Strengthening supply chain management through diversification of sources and logistics routes
• Global growth of cefiderocol (Fetroja) and collaborations with GARDP and CHAI for access to medicine in LMICs
• Development of multiple disease portfolios for acute infectious diseases
• Active investment in R&D for QOL diseases and collaborations with external partners
• Diversification of business portfolio beyond pharmaceuticals (HaaS strategy)
• Strengthening human capital management

Supply Chain Management

Supplier Audits: 76 important suppliers assessed in FY2023

Responsible Procurement

• SHIONOGI Group Procurement Policy
• SHIONOGI Group Business Partner Code of Conduct
• EcoVadis assessment

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events impacting raw material procurement
• Sea level rise

Transition Risks

• Introduction of carbon pricing

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: International Integrated Reporting Framework, GRI Standards, ISO 26000

Certifications: ISO 14001, ISO 45001

Third-party Assurance: KPMG AZSA Sustainability Co., Ltd.

UN Sustainable Development Goals

• Goal 3: Good Health and Well-being
• Goal 6: Clean Water and Sanitation
• Goal 7: Affordable and Clean Energy
• Goal 9: Industry, Innovation and Infrastructure
• Goal 13: Climate Action

Initiatives contribute to these goals through drug development, environmental protection, and sustainable business practices

Sustainable Products & Innovation

• Covgoze vaccine
• Xocova
• Fetroja
• Sustainable packaging

Awards & Recognition

• CDP A List company (Climate Change and Water Security)
• CDP Supplier Engagement Leader (Climate Change)
• Ministry of the Environment Eco-First Company
• Awards for horizontal recycling technology

Environmental Metrics

ESG Focus Areas

• Infectious Disease
• Human Resources
• Supply Chain Management
• Environmental Sustainability
• Governance

Environmental Achievements

• FY2030: Reduce Scope 1+2 by 46.2% and Scope 3 Category 1 by 20% (relative to FY2019); FY2050: Achieve zero emissions

Social Achievements

• Work engagement score (as of March 2023): 3.49
• Education and training expenses ¥152 million (FY2022)

Governance Achievements

• High-performing corporate governance framework
• Strengthening our compliance system in Japan

Climate Goals & Targets

Environmental Challenges

• Globalization of infectious diseases due to climate change
• High reliance on royalty business
• Lower patent cliff risks
• Lack of human resources to realize transformation
• Loss of business opportunities as nothing is done in emerging countries
• Higher hurdles to drug discovery and lower research efficiency
• Decrease in productivity/outflow of human resources
• Contraction in market for infectious disease drugs as awareness of hygiene increases
• Collapse of existing business models through disruptive innovation

Mitigation Strategies

• Continuous implementation of work style reforms and revitalization of employee communication
• Strengthening supply chain management
• Ensure compliance
• Strengthen governance
• Secure human resources by expanding the environment in which diverse human resources can play active roles
• Enhance employee awareness of transformation, to create innovation and enhance their ability to respond to change
• Construction of a business that does not rely on patents

Supply Chain Management

Responsible Procurement

• Conduct regular/non-regular discussions with suppliers to ensure stable procurement
• Support for strengthening relationship with contract manufacturers and maintaining their business continuity plans (BCP)

Climate-Related Risks & Opportunities